Despite Jobs Added, U.S. Unemployment Rose In July

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish. The job market is finally showing signs of improvement after months of disappointing numbers. The Labor Department said today that employers added 163,000 jobs to their payroll in July. That's the best performance since February. Of course, it wasn't all good news. With the jobs increase also came an uptick in the overall unemployment rate to 8.3 percent. As NPR's Jim Zarroli reports, that underscores just how tenuous the recovery remains.

JIM ZARROLI, BYLINE: The labor market has been dragging its feet for much of the spring and summer and pessimism about jobs has mounted every month. So the news today that job growth had suddenly picked up sent stock prices soaring. Carey Leahey is senior economist at Decision Economics.

CAREY LEAHEY: No one would be happy with the performance of the U.S. economy at the moment. But the fact that it's better than it was two or three months ago, that's the positive news from the report.

ZARROLI: With July's report the labor market has added 151,000 jobs on average every month this year. It's not exactly a great number, but it's enough to bring down the unemployment rate slowly. Jobs increased in virtually every sector of the labor market but government, including retail sales and professional and business services. Leahey says even manufacturing rose.

LEAHEY: It's easy to forget, because we're so unhappy with the performance of the U.S. economy, that we're the only major economy that has seen any pickup in manufacturing employment in the last couple of years.

ZARROLI: The July numbers were better than most economists had predicted. Still, the picture presented in the report was an ambiguous one. The growth in jobs was reported in what's called the Establishment Survey, which is based on data collected from businesses. It's the survey a lot of economists consider the more detailed and reliable picture of the labor market. But the overall unemployment rate is based on a separate Labor Department survey of U.S. households.

The two surveys sometimes diverge and that's what happened in July. The household survey said fewer people were looking for jobs and fewer were finding them. The overall unemployment rate rose a tenth of a percentage point. Ward McCarthy, chief financial economist at Jeffries and Company, says over time, all of the data pretty much point to the same conclusion.

WARD MCCARTHY: From that standpoint, they both also tell a similar story. And that is, yes, labor market conditions are improving somewhat, but it's a really slow process.

ZARROLI: For the Obama administration, today's report was a welcome piece of news after months of uncertainty. The chairman of the president's council of economic advisors, Alan Krueger, said people shouldn't read too much into a single month's report. But, he says, the trend is pretty clear. Over the past 29 months, the U.S. economy has added 4.5 million jobs.

ALAN KRUEGER: So far this year, over a million jobs have been added and those are encouraging signs, but there's a long way to go and much work remains to be done.

ZARROLI: The question now is how long that job growth can be sustained. The U.S. economy grew by just 1.5 percent during the second quarter of the year and consumer confidence has been dropping. Many economists say growth could pick up again before the end of the year, but not by much. And none of that bodes well for the job market. Republican presidential candidate Mitt Romney said today's report was a hammer blow for struggling middle class families.

Still, after today's numbers, the possibility of another recession, at least, seems more remote. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright National Public Radio.